Everett’s projected deficit drops to $2.6 million

EVERETT — Measures the city has taken to balance a growing budget deficit are having their effect on overall finances, but the city isn’t out of trouble yet.

Those measures, including new and increased utility taxes, plus the effects of a slowly improving economy, have reduced the city’s projected deficit from $12.7 million to $2.6 million.

City treasurer Susy Haugen presented an overview of the city’s finances in 2014 and projected into 2015 to the City Council Wednesday.

This year, Haugen told the council, revenues are coming in 2 percent above budget, or $59.1 million from Jan. 1 to June 30, while expenditures are running about 6.4 percent under budget, or $53.3 million at midyear.

Part of the savings during the year stems from keeping 49 vacant positions unfilled and finding money through continued auditing of the city’s tax receipts, she said.

Looking forward to 2015, the trend of general improvement continues.

The projections for next year include revenues rising to $122.4 million from $114.2 million projected for this year and expenditures rising to $124.9 million from $120.4 million in 2014.

It’s in the new taxes and fees where the 2015 budget is seeing the biggest improvement, Haugen said:

New and increased utility taxes are projected to bring in $4.2 million in new revenue.

Among other signs of general improvement in 2014, business and occupation taxes, driven largely by expansion of employment at Boeing, are expected to bring in an additional $1.2 million in revenue.

At the same time, cost-cutting measures scheduled to take effect next year are also working to drive the deficit down:

The equivalent of 15 full-time employees will be eliminated, saving $1.4 million.

Closing the Library Outreach Program and 2.6 full-time positions will save nearly $200,000.

Increasing home detention for minor offenders, rather than sending them to the county jail, will save approximately $300,000.

Other measures, such as housing some inmates outside the county, eliminating lifeguards at Silver Lake and cutting the city’s rainy day fund contributions will yield another $255,000 in savings.

There will also be significant increases in some expenditures next year that are largely outside the control of the city.

Those include the Snohomish County Jail exercising its option to increase its booking fees, resulting in an expected $900,000 in additional charges.

The city is also expected to provide $800,000 more in support to the Everett Public Facilities District, which operates Comcast Arena, because one of its creditors, the Bank of New York, will not be renewing its loans in the coming year, Haugen said.

Councilman Paul Roberts asked if the city’s credit rating would be affected by its increased support for the district.

Haugen said that it probably would not, given the city’s low debt.

Mayor Ray Stephanson acknowledged the increased financial burden, but pointed out that public facilities districts provide tax benefits to the city, and that once the arena’s debts are paid off, it becomes city property.

“At the end of the day, we’re going to end up with the facility, so we are also not going to let that debt not be paid,” Stephanson said.

The proposed budget will continue to be refined throughout the remainder of the year until its scheduled approval by the council on Dec. 3.